A while ago there was an uproar when it emerged that online businesses were, in effect, paying children to exploit their friendship networks to promote certain products, without disclosing they had a commercial relationship with the company that owned the thing they were speaking about so warmly. Cases were identified where children were getting paid according to the number of contacts they made thus encouraging them to engage with as many people as possible. This might have led some to connect with strangers.
The Bailey Review commented on it and the UK advertising regulator eventually stepped in to ban the practice but you have to wonder why anybody thought this would ever be an acceptable way to treat kids in the first place.
More recently, in the USA the New York State Attorney engaged with Viacom (Nickleodeon), Mattel, Hasbro and Jumpstart. Attorney Schneiderman announced that these businesses did not comply with the Children’s Online Privacy Protection Act. That’s the one that limits marketing to under 13s unless a parent has given their consent.
It wasn’t the substantive businesses themselves that were directly in breach but they had allowed third-parties to operate on their sites and these were not complying. Anyway the outcome was Viacom, Mattel, Hasbro and Jumpstart had to pay a total of $835,000 in fines and agree to a set of reforms. They are now mandated to vet the practices of all third-party services before letting them on their virtual properties.
Should these businesses have thought of this before? Probably, but aside from that two things spring to mind
- It took the Attorney General of New York two years to satisfy himself that a breach had occurred then bring his investigation to a conclusion. I do not know a single children’s organization anywhere in the world that has the resources or the alliances which would allow them to get anywhere near acting as a consumer watchdog in matters of this kind. It is not right that we should be so dependent on government agencies.
- Do we think the principle illustrated by this case could be extended to the platform providers that allow third-party apps to be sold on or through their services?